THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. 

	Warrant No.
      «WarrantNo»  	Number of
      Shares: «NoOfShares»  
	Date of
      Issuance: December 9, 2009  	(subject to
      adjustment)  



MTI MICROFUEL CELLS
INC. 

COMMON STOCK PURCHASE
WARRANT 

     MTI
MicroFuel Cells Inc., a Delaware corporation (the “Company”) hereby certifies that
«Holder», or its registered assigns (the “Registered Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
after December 8, 2010 and on or before the Expiration Date (as defined in
Section 7
below), up to «NoOfShares» shares of Common Stock of the Company, par value
$0.01 (“Common Stock”), at a purchase price of $0.070 per share. The shares
purchasable upon exercise of this Warrant and the purchase price per share, as
adjusted from time to time pursuant to the provisions of this Warrant, are
hereinafter referred to as the “Warrant
Stock” and the “Purchase Price,”
respectively. 

     1.
Exercise. 

          (a) Manner of Exercise.
This Warrant may be exercised by the
Registered Holder, in whole or in part, by surrendering this Warrant, with the
purchase/exercise form appended hereto as Exhibit A duly executed by such
Registered Holder or by such Registered Holder’s duly authorized attorney, at
the principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full of the Purchase Price
payable in respect of the number of shares of Warrant Stock purchased upon such
exercise. The Purchase Price may be paid by cash, check, wire transfer or by the
surrender of promissory notes or other instruments representing indebtedness of
the Company to the Registered Holder. 

          (b) Effective Time of Exercise. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business on
the day on which this Warrant shall have been surrendered to the Company as
provided in Section 1(a) above. At such time, the person or persons in whose name or
names any certificates for Warrant Stock shall be issuable upon such exercise as
provided in Section 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates. 




          (c) Net Issue Exercise.

               (i) In lieu of exercising this Warrant in the manner
provided above in Section 1(a), the
Registered Holder may elect to receive shares equal to the value of this Warrant
(or the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with notice of such election on the
purchase/exercise form appended hereto as Exhibit A duly executed by such
Registered Holder or such Registered Holder’s duly authorized attorney, in which
event the Company shall issue to such Registered Holder a number of shares of
Warrant Stock computed using the following formula: 


	X	   =
        	     	Y (A - B)	 
	  			A	 




	Where	     	X	   =   	The number of shares of
      Warrant Stock to be issued to the Registered Holder. 
	  		  	  	  
	  
	  		Y	   =   	The number of shares of
      Warrant Stock purchasable under this Warrant (at
      the date of such calculation). 
	  		  	  	  
	  
	  		A	   =  	The fair market
      value of one share of Warrant Stock (at the date of such calculation). 
	  		  	  	  
	  
	  		B	   =  	The Purchase Price (as
      adjusted to the date of such
calculation). 



     For purposes of this Section 1(c), the fair
market value of Warrant Stock on the date of calculation shall mean with respect
to each share of Warrant Stock the fair market value of Warrant Stock shall be
at the highest price per share which the Company could obtain on the date of
calculation from a willing buyer (not a current employee or director) for shares
of Warrant Stock sold by the Company, from authorized but unissued shares, as
determined in good faith by the Board of Directors, unless the Company is at
such time subject to an acquisition as described in Section 7(b) below, in which case the
fair market value of Warrant Stock shall be deemed to be the value received by
the holders of such stock pursuant to such acquisition. 

          (d) Delivery to Registered Holder.
As soon as practicable after the exercise of
this Warrant in whole or in part, and in any event within twenty (20) days
thereafter, the Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct:


               (i) a certificate or certificates for the number of shares of Warrant Stock
to which such Registered Holder shall be entitled, and 

               (ii) in case such exercise is in part only, a new warrant or warrants (dated
the date hereof) of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Warrant Stock equal (without giving effect
to any adjustment therein) to the number of such shares called for on the face
of this Warrant minus the number of such shares purchased by the Registered
Holder upon such exercise as provided in Section 1(a) or 1(c) above. 

2




     2. Adjustments. 

          (a) Stock Splits and Dividends.
If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment. 

          (b) Reclassification, Etc.
In case there occurs any reclassification or
change of the outstanding securities of the Company or of any reorganization of
the Company (or any other corporation the stock or securities of which are at
the time receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof,
then and in each such case the Registered
Holder, upon the exercise hereof at any time after the consummation of such
reclassification, change, or reorganization shall be entitled to receive, in lieu of the
stock or other securities and property receivable upon the exercise hereof prior
to such consummation, the stock or other securities or property to which such
Registered Holder would have been entitled upon such consummation if such
Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment pursuant to the provisions of this
Section 2. 

          (c) Adjustment Certificate.
When any adjustment is required to be made in
the Warrant Stock or the Purchase Price pursuant to this Section 2, the
Company shall promptly mail to the Registered Holder a certificate setting forth
(i) a brief statement of the facts requiring such adjustment, (ii) the Purchase
Price after such adjustment and (iii) the kind and amount of stock or other
securities or property into which this Warrant shall be exercisable after such
adjustment. 

     3. Transfers. 

          (a) Unregistered Security. Each holder of this Warrant
acknowledges that this Warrant and the Warrant Stock have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and agrees not to
sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant, any Warrant Stock issued upon its exercise in the absence of (i) an
effective registration statement under the Securities Act as to this Warrant or
such Warrant Stock and registration or qualification of this Warrant or such
Warrant Stock under any applicable U.S. federal or state securities law then in
effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. Each certificate or other
instrument for Warrant Stock issued upon the exercise of this Warrant shall bear
a legend substantially to the foregoing effect. 

3




          (b) Transferability.
Subject to the provisions of Sections 3(a) and
6 hereof,
this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of the Warrant with a properly executed assignment (in the form
of Exhibit B hereto) at the principal office of the Company; provided, however, that this Warrant
may not be transferred in whole or in part without the prior written consent of
the Company. 

          (c) Warrant Register.
The Company will maintain a register
containing the names and addresses of the Registered Holders of this Warrant.
Until any transfer of this Warrant is made in the warrant register, the Company
may treat the Registered Holder of this Warrant as the absolute owner hereof for
all purposes; provided, however, that if this Warrant is properly assigned in blank, the
Company may (but shall not be required to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary. Any Registered Holder may change such Registered Holder’s address as
shown on the warrant register by written notice to the Company requesting such
change. 

     4. No
Impairment. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will (subject to Section 14 below) at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Registered Holder against impairment. 

     5.
Representations and Warranties of the
Registered Holder. The Registered Holder hereby
represents and warrants to the Company that: 

          (a) Authorization. The Registered Holder has full power and authority to enter
into this Warrant. The Warrant, when executed and delivered by the Registered
Holder, will constitute a valid and legally binding obligation of the Registered
Holder, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of
creditors’ rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies.


          (b) Purchase Entirely for Own Account. This Warrant is issued to the
Registered Holder in reliance upon the Registered Holder’s representation to the
Company, which by the Registered Holder’s acceptance of this Warrant, the
Registered Holder hereby confirms, that the Warrant to be acquired by the
Registered Holder and the Warrant Stock (collectively, the “Securities”) will be
acquired for investment for the Registered Holder’s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that the Registered Holder has no present intention of selling,
granting any participation in, or otherwise distributing the same. By accepting
this Warrant, the Registered Holder further represents that the Registered
Holder does not presently have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities. The
Registered Holder has not been formed for the specific purpose of acquiring the
Securities. 

4




          (c) Restricted Securities. The Registered Holder understands
that the Securities have not been, and will not be, registered under the
Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Registered
Holder’s representations as expressed herein. The Registered Holder understands
that the Securities are “restricted securities” under applicable U.S. federal
and state securities laws and that, pursuant to these laws, the Registered
Holder must hold the Securities indefinitely unless they are registered with the Securities
and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. The Registered
Holder acknowledges that the Company has no obligation to register or qualify
the Securities for resale. The Registered Holder further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Securities, and on requirements relating to the
Company which are outside of the Registered Holder’s control, and which the
Company is under no obligation and may not be able to satisfy. 

          (d) No Public Market. The Registered Holder understands
that no public market now exists for any of the securities issued by the
Company, and that the Company has made no assurances that a public market will
ever exist for the Securities. 

     6.
Lock-up Agreement. 

          (a) Lock-up Period; Agreement. In connection with the initial
public offering of the Company’s securities and upon request of the Company or
the underwriters managing such offering of the Company’s securities, the
Registered Holder agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the
Company (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (such period not to exceed one hundred eighty (180) days, or
such longer period, not to exceed thirty (30) days after the expiration of the
one hundred eighty (180) -day period, as the underwriters of the Company shall
request in order to facilitate compliance with FINRA Rule 5110) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the Company’s initial public
offering. 

          (b) Stop-Transfer Instructions.
In order to enforce the foregoing covenants,
the Company may impose stop-transfer instructions with respect to the securities
of the Registered Holder (and the securities of every other person subject to
the restrictions in Section
6(a)). 

          (c) Transferees Bound. The Registered Holder agrees
that prior
to the Company’s initial public offering it will not transfer securities of the
Company unless each transferee agrees in writing to be bound by all of the
provisions of this Section 6. 

5




     7.
Termination.

          (a) This Warrant (and the right to purchase securities upon exercise hereof)
shall terminate upon the earliest to occur of the following (the
“Expiration Date”): (a) December 8, 2016, (b) the sale, conveyance or disposal
of all or substantially all of the Company’s property or business or the
Company’s merger with or into or consolidation with any other corporation (other
than a wholly-owned subsidiary of the Company) or any other transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of (an “Acquisition”), provided that this
Section 7
shall not apply to a merger effected exclusively for the purpose of changing the
domicile of the Company or to an equity financing in which the Company is the
surviving corporation or to a bona
fide venture capital financing pursuant to
which the Company issues and sells its equity securities, or (c) the closing of
any public offering pursuant to a registration statement under the Securities
Act. 

          (b) Notwithstanding anything to the contrary herein, in the event the Company
consummates an Acquisition prior to the date that this Warrant becomes
exercisable that results in the termination of this Warrant pursuant to Section
7(a) above, the Holder shall be entitled to receive such stock and other
securities and property (including cash) to which such Holder would have been
entitled upon such consummation of an Acquisition if such Holder had so
exercised this Warrant, less the Purchase Price per share of Warrant Stock
hereunder. 

     8.
Notices of Certain
Transactions. In case: 

          (a) the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or 

          (b) of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or substantially all of
the assets of the Company, or 

          (c) of the voluntary or involuntary dissolution, liquidation or winding-up of
the Company, or 

          (d) of any redemption of the Common Stock or mandatory conversion of the
Common Stock into Common Stock of the Company, 

then, and in each such case, the
Company will mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation, winding-up, redemption or conversion
is to take place, and the time, if any is to be fixed, as of which the holders
of record of Common Stock (or such other stock or securities at the time
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation, winding-up, redemption or conversion) are to
be determined. Such notice shall be mailed at least five (5) days prior to the
record date or effective date for the event specified in such notice.


6




     9. Reservation of Stock.
The Company will at all times reserve and
keep available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.


     10. Exchange of Warrants. Upon the surrender by the Registered
Holder of any Warrant or Warrants, properly endorsed, to the Company at the
principal office of the Company, the Company will, subject to the provisions of
Section 3
hereof, issue and deliver to or upon the order of such Registered Holder, at the
Company’s expense, a new Warrant or Warrants of like tenor, in the name of such
Registered Holder or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant or Warrants so surrendered. 

     11. Replacement of Warrants.
Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor. 

     12. No Rights as Stockholder. Until the exercise of this Warrant,
the Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company. 

     13. No Fractional Shares.
No fractional shares of Common Stock will be
issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company’s Board of Directors. 

     14. Amendment or Waiver.
Any term of this Warrant may be amended or
waived only by an instrument in writing signed by the party against which
enforcement of the amendment or waiver is sought. 

     15. Headings. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant. 

     16. Governing Law. This Warrant shall be governed, construed and interpreted in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law. 

     17. Survival. Unless otherwise set forth in this Warrant, the warranties,
representations and covenants of the Company and the Registered Holder or such
Registered Holder's authorized transferee contained in or made pursuant to this
Warrant shall survive the execution and delivery of this
Warrant.

7




     18. Transfer; Successors and Assigns. The terms and conditions of this
Warrant shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Warrant, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Warrant, except as expressly provided in
this Warrant. 

     19. Counterparts. This Warrant may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one instrument. 

     20. Attorney’s Fees. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
this Warrant, the prevailing party shall be entitled to reasonable attorney’s
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled. 

     21. Severability. If one or more provisions of this Warrant are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Warrant, (b) the balance of this Warrant
shall be interpreted as if such provision were so excluded and (c) the balance
of this Warrant shall be enforceable in accordance with its terms. 

     22. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party under this Warrant, upon any breach
or default of any other party under this Warrant, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Warrant, or any waiver on the part of any party of
any provisions or conditions of this Warrant, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Warrant or by law or otherwise afforded to any
party, shall be cumulative and not alternative. 

     23. Notices. Any notice required or permitted by this Warrant shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by overnight courier or sent by fax, or 48 hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, addressed to
the party to be notified at such party’s address as set forth on the signature
page, or as subsequently modified by written notice given pursuant to this
Section 23.


     24. Entire Agreement. This Warrant, and the documents
referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements relating to the subject matter hereof existing between the parties
hereto are expressly canceled.

8





		THE COMPANY:
		   
		MTI MICROFUEL CELLS
  INC.
		  
		By:	 	 
		(Signature)	 
		Name:	 	 
		Title:	 	 
		  
		Address:
		431 New Karner Road
		Albany, NY 12205
		Fax:
  518-533-2201



	Accepted and
      Agreed:  
	 
	REGISTERED
      HOLDER:  
	 
	«HOLDER»  
	 
	«HolderSignatureBlock»  
	 
	Address:  
	«HolderAddress1»  
	«HolderAddress2»  
	Fax:
      «HolderFax»  



9




EXHIBIT A 

EXERCISE
FORM 

	To: 
      MTI MICROFUEL CELLS INC.	Dated:	 	 



     The
undersigned, pursuant to the provisions set forth in the attached Warrant No.
«WarrantNo», hereby irrevocably elects to (a) purchase ___________ shares of the
Common Stock covered by such Warrant and herewith makes payment of $_________,
representing the full purchase price for such shares at the price per share
provided for in such Warrant, or (b) exercise such Warrant for
___________ shares purchasable under the Warrant pursuant to the Net Issue
Exercise provisions of Section 1(c) of the Warrant. 

     The
undersigned acknowledges that it has reviewed the representations and warranties
contained in Section 5 of the Warrant and by its signature below hereby makes
such representations and warranties to the Company as of the date hereof.


		«HOLDER»
		 
		«HolderSignatureBlock»






EXHIBIT B 

ASSIGNMENT
FORM 

     FOR VALUE
RECEIVED, the undersigned transferor hereby sells, assigns and transfers all of
the rights of the undersigned under the attached Warrant with respect to the
number of shares of MTI MicroFuel Cells Inc. Common Stock covered thereby set
forth below, unto: 

	Name of Assignee	     
      	Address/Fax Number	     
      	No. of Shares



	Dated:	 	 	  
	  	TRANSFEROR: 
    
		 
	  	«HOLDER»  
		 
	  	«HolderSignatureBlock»